CYPRUS COMPANY FORMATION
Frequently Asked Questions on Cyprus Company
The most usual questions regarding the Cyprus Company and the registration procedure.
A Cyprus Limited Company LTD with shares.
There is no minimum or maximum limit of the shared capital of Cyprus company?
- Address of residence or Business address
- Date of birth
- Information related to current or past business activities, source of income and relevant proof (ex. financial reports of shareholder’s current company)
- Number of shares of the shareholder
For the new company:
- Description of the activities of the new company
- Two or three alternative name options for the new company
The procedure can be identified in two stages.
- Company name approval
In the first stage the company name must be approved. The approval can take 1 to 3 working days.
- Memorandum and application for registration
As soon as the name is approved, the memorandum of the new company is prepared according to the activities and operations of the company and is then signed by the shareholders.
The company registration application is submitted online to the Department of Companies Registrar right after the signage of the engagement letters of the directors. The company is formed after 4-5 working days.
The whole registration process takes approximately 6-8 working days.
After the registration, the following documents will be submitted to the owner of the company:
- Certificate of Corporation
- Memorandum and Articles of Association
- List of Owners, Directors, Shareholders
- Certification of company Registered office
- Shareholders certificate
No, you don’t need to be personally in Cyprus to register your company.
Cyprus Limited companies have to state at least one shareholder and cannot have more than fifty (50)
Board Members (Directors/Secretary)
The company should have at least one board member.Board members should be at least 18 years old.
A Cyprus company has to state a registered office in the republic, that cannot be a PO Box.
All notifications and notices are sent to the registered office of the company, e.g. letters from the Registrar of Companies, the various registers (e.g. board members, directors, charges, etc.) and other documents are kept, as required and provided for by the Companies Law.
The operations of the company are handled by the advisors – who exercise all the powers of the company with the exception of the powers that either the Companies Law or the company’s Articles of Association require to be exercised by the company in a general meeting.
The directors of the company are legally responsible for the management of the company, and for keeping the accounting books which are mandatory for the preparation of the annual financial statements. At the same time, the directors are responsible for the submission of the company’s tax declaration and the execution of all operations related to the submission and payment of the imposed tax.
The company secretary shall be appointed by the directors for a period, remuneration and terms as they may think fit.
It is noted that the board members and the secretary are responsible for the submission of the relevant documents and notes regarding the updating of the company on the Companies registry.
A.Registration in Tax Department and issuance of Tax Identification Number within a month.
B.Registration of the company in the UBO registry (Ultimate Beneficial Owner) within a month.
Α. Company Registrar
Every company registered in the Cyprus Registry of Companies must, by the end of the year 31/12, submit the audited financial statements, the annual report and pay the fee of €20.
A company that fails to submit its annual report on time is subject to a one-time monetary charge of fifty euros (€50) and to a further monetary charge for each day of the continuation of this violation up to the maximum total amount of five hundred euros (€500).
Β.Tax Department – Regulations
Every Cyprus Registered Company has the obligation to submit a Tax Declaration Form by the end of the financial year (1/1-31/12) within 15 months, i.e. 31/3 of the following year. In practice, however, this applies only to companies that do not have profits. In the event that it has not been submitted on time, there is a fine of €100.
In detail, the tax legislation in relation to the payment of corporation tax obliges companies to pay corporation tax in full by 31/7 of the following year. A grace period of one month is given and therefore the last deadline is moved to 31/8. Profitable companies should complete the audit of the financial statements for the period ended 31/12 by next July within the deadline so that the corporate taxation can be finalized and the repayment made by 31/8.
In the event that the tax balance is paid after 31/8 of the following year, an additional charge of 5% is applied and also a daily percentage charge that varies from year to year.
Above we have referred to the balance of corporate taxation and not the total corporate taxation because each company based on tax legislation should have already paid at least the 75% of the year’s taxation (provisional taxation) by 12/31 of the same year . In cases where 75% has not been paid then there is also a charge of 10% on the total corporate taxation.
Submit VAT returns on a quarterly basis if the company is registered for VAT purposes. If the company’s VAT transactions exceed €15,600 in 12 consecutive months, then the company is obliged to register for VAT and submit quarterly returns. Returns must be submitted within 40 days of the end of each quarter according to the VAT certificate delivered to the company’s management – i.e. for the quarter ending 31 March, the submission must be made by 10 May.
Submission of VIES declarations on a monthly basis if the company has transactions with European companies registered for VAT.
Declarations must be submitted by the 15th day of the following month.
Social Insurance Department
When the company has a payroll, monthly payroll reports must be submitted to the social security administration – by the end of the following month.
The company director.
Anyone authorized by the Ultimate Beneficial Owner (UBO) of the company and approved by the company’s Board of Directors.
Our office completes the bank account opening applications and mails them to the shareholders for signature. Upon receipt of the original signed application,a video conference will be held with the bank personnel within 5 working days and then the bank account will be opened.
Usually is in five (5) working days after the receipt of the signed bank account opening application.
The International Financial Reporting Standards – IFRS are followed as for most European countries.
As soon as someone becomes a customer, a dedicated cloud folder is shared along with instructions for the filing of the accounting information.
Taxable profits for all Cypriot companies will be taxed at 12.5%
- Profits from the disposal of equity securities are exempt from taxation
- Profits from a permanent business abroad are fully exempt from corporate taxation under certain conditions
- Dividend income received in Cyprus by a foreign company is fully exempt from tax in Cyprus, under certain conditions
- Interest income derived from commercial activities, including interest related to commercial activities is subject to income tax of 12.5%
- No tax is withheld on dividends and interest paid to non-residents of Cyprus. Also, no tax is withheld on royalties from sources outside Cyprus
- Group tax reliefs apply for companies based in Cyprus
- Reorganizations, mergers, acquisitions and mergers of companies have no tax implications
- Capital gains are not subject to taxation except in the case of the sale of immovable property located in Cyprus
- Extensive network of agreements to avoid double taxation with other countries